AUTOMATED BUSINESS PROCESSES

AUTOMATED BUSINESS PROCESSES

In the days of manual accounting, most business processes were carried out manually. For example, a sales invoice would be raised manually and based on the shipment of goods the inventory would be manually updated for reducing the stock. Subsequently the accounting entries would be manually passed by debiting and crediting the respective accounts, through journal entries.
With the advent of technology, most business process today have been automated to make enterprises more efficient and to handle the large volumes of transactions in today’s world. The manual example given above would be performed in an integrated computer system as follows:

•  Raise invoice to customer in a computer system using relevant application software;
•  The system automatically reduces the stock;
•  The system instantly passes the necessary accounting entries by adding relevant transactions in relevant database tables:

                o Debit: Customer
                o Credit: Sales, Indirect Taxes
                o Debit: Cost of Goods Sold
                o Credit: Inventory